The first LNG vessel from the lower 48 U.S. states is on its way to China, according to a Reuters interactive map on July 29.
The news is the latest sign that the expanded Panama Canal is allowing U.S. exports to reach the world's top LNG buyers in Asia.
Royal Dutch Shell Plc's (NYSE: RDS.A) Maran Gas Apollonia loaded up with gas at Cheniere Energy Inc.'s (NYSE: LNG) Sabine Pass LNG export plant in Louisiana, the map showed. It passed through the canal earlier this week and was moving northwest up the west coast of Mexico on the afternoon of July 29.
Shell does not disclose the destination of its vessels, company spokesman Ray Fisher said.
LNG experts at energy data provider Genscape confirmed the ship's destination was China, but said that could change.
China's fast-growing demand for gas, to help alleviate high levels of pollution from burning coal, has outstripped its domestic supply since 2007, according to U.S. Energy Information Administration data.
The Panama Canal shaves distances between export plants dotted along the Gulf of Mexico and Asia to 14,484 km (9,000 miles) from 25,750 km (16,000 miles), allowing U.S. producers to better compete in one of the world's biggest gas consuming markets.
Since Sabine Pass started exporting gas in February, 20 ships have picked up about 65.9 billion cubic feet of gas from the facility, based on the capacity of the tankers.
So far, gas from Sabine has been delivered to South America, India, the Middle East and Europe.
The U.S., which has been exporting LNG to Asia from Alaska since 1969, has not shipped gas directly to China at least since 1973, according to federal energy data going back that far.
The United States, however, did re-export some gas from at least one other country to China in 2011, according to the federal data.
A surge in U.S. gas production from the shale revolution stimulated billions of dollars of investment in building LNG export terminals, transforming the country from an importer of LNG to an exporter of the fuel.
By 2019, the U.S. is expected to be pumping out around 60 million tonnes of LNG annually.
So far only Sabine Pass is exporting LNG from the lower 48 states and output will double to 9 million tonnes per annum as Cheniere adds a second production line later this year.
Recommended Reading
BP Awards Subsea Alliance Contract for UK North Sea Development
2024-07-31 - SLB, OneSubsea, Subsea 7 and the Subsea Integration Alliance will increase speed of tool delivery, optimize installation and reduce rig days at BP’s Murlach development in the North Sea.
Superior Sees Executive Leadership Changes
2024-08-15 - Superior Energy Services’ president, CEO and chairman Brian Moore is retiring, and his roles are to be split between the two people succeeding him.
Atlas Energy Appoints Chris Scholla as New COO
2024-08-07 - Chris Scholla previously served as Atlas Energy Solutions’ chief supply chain officer and pushed the company into the oilfield logistics market.
Trans Mountain Appoints New CEO, President
2024-08-23 - Trans Mountain appointed Mark Maki to CEO, succeeding Dawn Farrell who will now be chairman of the board.
Murphy Oil Names New CEO, Adds Two Directors to Board
2024-10-06 - Murphy Oil’s current COO Eric M. Hambly has been appointed to CEO and president, succeeding Roger W. Jenkins. The board also added Hambly and Robert B. Tudor III as new directors.